Considering Adoption? Consider Adopting a Child in Foster Care

Posted November 12, 2009 in Your Family & The Law by

November is National Adoption Month. According to several surveys, more than one-third of Americans have considered adopting a child, but only about 2 percent of Americans have actually adopted a child. There are a number of reasons why people consider adoption, but don’t follow through on it. These include the cost of adoption, the lack of adoptable children or children who fit specific age/gender/racial parameters, the time is takes to complete an adoption, and administrative hurdles that must be completed prior to adopting a child.

One of the biggest sources of adoptable children is the U.S. foster care system. According to the U.S. Department of Health & Human Services’ Children’s Bureau, in 2007 (the most recent year for which data is available) approximately 783,000 children were in foster care in the United States, more than 130,000 of those children were waiting to be adopted, but only 51,000 were actually adopted during the year.

Many prospective parents don’t consider kids in foster care because they may be older, be a racial minority or be part of a group of siblings. Prospective parents may also be concerned about potential health or behavioral problems, or fear that biological parents may attempt to regain custody.

These concerns are all valid, but if you are considering adoption, it’s still worthwhile to investigate adopting a child from foster care because you may find a child who’s the perfect addition to your family.

As a foster parent who is considering adoption, or a prospective parent considering the adoption of a child in foster care, here are some legal issues to be aware of.

Differences from Traditional Adoptions

Several key factors differentiate foster child adoptions from traditional adoptions.

Foster care adoptions are usually handled by state agencies, though the state may outsource responsibilities to a private agency. Also, foster care adoptions cost significantly less than traditional adoptions, or may even be free. If the child is considered a "special needs" child, subsidies may be available. (Special needs children include those who are minorities; have siblings who also need adopting; were exposed to drugs or alcohol before they were born; are older than 5; or have mental, physical or emotional problems.) In addition, you may qualify for a federal adoption tax credit.

Types of Foster Child Adoptions

There are several ways in which prospective parents can adopt foster children. Prospective parents can:

  • Adopt a child or group of siblings whose parents have already relinquished their parental rights or had those rights terminated.
  • Take in a foster child whose biological parents still have rights. The foster parents agree, in advance, to adopt the child if he or she isn’t reunited with the parents or placed with another biological family member. This type of adoption is called "concurrent planning" because multiple avenues of resolution are being pursued simultaneously.
  • Adopt a child who was placed with you as a foster child, but whom you didn’t originally intend to adopt.

Adoption Tax Credits

Federal laws allow for parents to deduct certain expenses incurred during adoption. Parents are subject to certain income limits, but if they are eligible, the Tax Code allows for the following:

  • Credit is given for qualifying expenses, which include adoption fees, attorney costs, court costs and travel expenses
  • Credit is subtracted from your total tax liability
  • Credits may be taken in the year following the year in which expenses are incurred, or the current year in which the adoption becomes final
  • You may not take a credit for adoption expenses that were reimbursed by your employer, but reimbursed expenses may be excluded from your gross income
  • The adopted child must be under 18, or physically and/or mentally unable to care for himself; and
  • The adoption of a child with special needs may allow you to deduct more qualified adoption expenses.

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